Corporate Finance: Core Principles and Applications (Mcgraw-hill Education Series in Finance, Insurance, and Real Estate)
Corporate Finance: Core Principles and Applications (Mcgraw-hill Education Series in Finance, Insurance, and Real Estate)
5th Edition
ISBN: 9781259289903
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Chapter 5, Problem 10CQ
Summary Introduction

To discuss: The difference between the yield curve and the term structure of interest rates

Introduction:

The term structure of interest rates refers to the relationship or connection between the long-term interest rates and short-term interest rates. In other words, the term structure of interest rates refers to the nominal interest rate on the pure discount bonds that are default free irrespective of the maturity of the bond.

A treasury yield curve is a graphical representation of yields of the bonds and treasury notes in relation to the maturity date

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